The President's
announcement today about opening up previously off-limits areas
of the Pacific and Atlantic coasts and eastern Gulf of Mexico
to oil and gas drilling also opens up a lot of opportunity for
silliness in the news media. It's Reserves Time, baby!

That's a number
thrown around for the entire Gulf, most of which is already open
to drilling. The government's estimate for recoverable reserves
in the newly opened portion of eastern Gulf of Mexico is 3 -4
billion barrels. This is thought to be the richest of the parcels
that could be leased in 2012 and developed around 2020.

Ah jeez, reserves.
Remember, reserves numbers are usually used by hucksters to obscure
issues and confuse an audience. Reserves numbers are all but
irrelevent. What kind of increase in actual flow rate can we
expect from opening up these new areas to drilling? The
EIA estimated in 2007 that opening up the entirety of the off-limits
areas of the lower 48 could raise production by around 200,000
barrels per day in 2030; they did not expect the increase to
have a significant impact on prices. By 2009 they had updated
their projection with as much optimism as they could muster:
opening up the entire lower 48 could lower the price of gas by
3¢ per gallon, but not until 2030 or so.

So that's how
those impressive-sounding reserves actually play out in real
life (at best). How does that time-frame work for you? How 'bout
those three cents per gallon? What are you going to do with yours?
I'm going to freaking Cinn-a-bon.

One of the common
absurdities you'll find in articles about this is an extrapolation
of how long those precious reserves would last "at current
rates of consumption." Take this article
by John Broder
for example. Broder ends his little article noting estimates
that there might be "as much as a three-year supply of recoverable
oil ... at current rates of consumption." Let's see here.
Current rate of consumption -- about 19 million barrels per day.
The fact is that all this hypothetical new drilling could not
supply the country's needs for a single day, let alone three
years, "at current rates of consumption." In fact all
of North America including Canada and Mexico and the North Slope
of Alaska can not supply Americans with enough oil for a single
day or a single hour "at current rates of consumption."
It's good times when people start comparing their reserves estimates
to "current rates of consumption." Good times.

Obama will use
this as political capital to get other things through and so
he can say look, I'm making the "tough choices" necessary
to wean America off foreign oil. He certainly is not. Not yet.